Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 67% of modeled bridge. Strengths: Bed Count. Risks: Occupancy Rate. Risk-adjusted uplift: $1.4M (vs $2.1M modeled).
EBITDA Bridge — 7 RCM Levers
Each bar shows the annual EBITDA impact at full run-rate. Revenue levers increase top-line; cost levers reduce operating expense; cash acceleration releases working capital. Calibrated to published research bands (Denial 12%→5% = $8-15M on $400M NPR).
Lever Detail
Each value shows its data source. SELLER = seller data room, DEFAULT = model default, BENCHMARK = P75 peer benchmark.
| Lever | Current | Target | Revenue | Cost | EBITDA | WC | Ramp |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $788K | $788K | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $759K | $22K | $781K | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $121K | $359K | $480K | $1.5M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $25K | $25K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 47.6% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
| CDI / Case Mix Index | 135.0% DEFAULT | 142.0% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
Implementation Timing Curve
Linear ramp to full run-rate per lever. Month 0 = close date. Partners should expect 60-70% of total uplift realized by month 12.
| Lever | M0 | M3 | M6 | M9 | M12 | M18 | M24 | M36 |
|---|---|---|---|---|---|---|---|---|
| Cost to Collect | $0 | $197K | $394K | $591K | $788K | $788K | $788K | $788K |
| Denial Rate Reduction | $0 | $195K | $390K | $585K | $781K | $781K | $781K | $781K |
| A/R Days Reduction | $0 | $160K | $320K | $480K | $480K | $480K | $480K | $480K |
| Clean Claim Rate | $0 | $13K | $25K | $25K | $25K | $25K | $25K | $25K |
| Cumulative | $0 | $565K | $1.1M | $1.7M | $2.1M | $2.1M | $2.1M | $2.1M |
Returns Sensitivity (IRR / MOIC)
5-year hold, 5.5x leverage, 3% organic growth, 10%/yr debt paydown. Green = exceeds 20% IRR hurdle. Amber = 15-20%. Red = below hurdle or loss. RCM uplift of $2.1M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 51% / 8.0x | 56% / 9.2x | 60% / 10.4x | 62% / 11.1x | 64% / 11.7x |
| 9.0x | 46% / 6.7x | 51% / 7.8x | 55% / 8.9x | 57% / 9.5x | 59% / 10.0x |
| 10.0x | 42% / 5.7x | 46% / 6.7x | 50% / 7.7x | 52% / 8.2x | 54% / 8.7x |
| 11.0x | 37% / 4.9x | 42% / 5.8x | 46% / 6.7x | 48% / 7.2x | 50% / 7.6x |
| 12.0x | 33% / 4.2x | 38% / 5.0x | 43% / 5.9x | 44% / 6.3x | 46% / 6.7x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 5% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 6.2x, adding 2.3 turns of cushion.
5-Year Value Creation Waterfall
EBITDA trajectory: 3% organic growth + RCM uplift ramp (full run-rate at month 18).
| Base EBITDA | RCM Uplift | Total | Margin | |
|---|---|---|---|---|
| Entry | $5.6M | — | $5.6M | 14.1% |
| Year 1 | $5.7M | +$1.4M | $7.1M | 18.1% |
| Year 2 | $5.9M | +$2.1M | $8.0M | 20.3% |
| Year 3 | $6.1M | +$2.1M | $8.2M | 20.7% |
| Year 4 | $6.3M | +$2.1M | $8.3M | 21.2% |
| Year 5 | $6.5M | +$2.1M | $8.5M | 21.6% |
Achievement Sensitivity
What if we only achieve a fraction of each lever? 50% = conservative, 75% = base management case, 100% = plan, 120% = stretch.
| Lever | 50% | 75% | 100% | 120% |
|---|---|---|---|---|
| Cost to Collect | $394K | $591K | $788K | $946K |
| Denial Rate Reductio | $390K | $585K | $781K | $937K |
| A/R Days Reduction | $240K | $360K | $480K | $576K |
| Clean Claim Rate | $13K | $19K | $25K | $30K |
| Total | $1.0M | $1.6M | $2.1M | $2.5M |
Peer Context — Where This Hospital Sits
Key metrics vs 83 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 14.1% | -11.4% | -1.9% | 11.5% | P78 |
| Net-to-Gross | 40.1% | 29.7% | 38.6% | 47.6% | P52 |
| Occupancy | 45.8% | 25.4% | 37.1% | 57.8% | P63 |
| Rev/Bed | $1.6M | $436K | $1.1M | $2.1M | P65 |
| Exp/Bed | $1.4M | $421K | $1.1M | $2.2M | P55 |
Bridge Methodology
Coefficients calibrated to published research bands: denial 12%→5% = $8-15M on $400M NPR. Current metrics estimated from HCRIS public data and ML predictions. Target metrics set at P75 peer benchmarks with 60% gap closure assumption. Revenue levers use NPR × delta × avoidable share. Cost levers use claims volume × cost per reworked claim. Working capital from AR reduction is one-time cash (not included in recurring EBITDA). Returns assume 5.5x leverage, 3% organic growth, 10%/yr debt paydown.